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Title:Budget deficit, size of the public sector and majority voting PDF Logo
Authors:Siebel, Jens
Issue Date:2005
Series/Report no.:Volkswirtschaftliche Diskussionsbeiträge / Universität-Gesamthochschule-Siegen, Fachbereich Wirtschaftswissenschaften 120
Abstract:In this paper Tabellini's and Alesina's (1990) median voter model for the explanation of budget deficits is modified by endogenizing the private sector. Debt finance is supplemented by taxing a private consumption which serves as an additional source of revenue for funding the public sector. The introduction of the private sector enables us to explain the budget balance as a result of political polarization with a left-wing party and a right-wing party having different preferences for the size of the public sector.
Document Type:Working Paper
Appears in Collections:Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen

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